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Workplace Wellbeing

Originally Published on
SummaryNov, 2017

Employee wellbeing is moving into the mainstream as more companies recognise how it can improve productivity, reduce staff turnover and cut ‘presenteeism’, where staff are physically at work but disengaged. The benefits are particularly valuable in small firms which can be hard-hit even by a single staff member being absent. Part of its success is that employers are increasingly realising that the benefits of employee wellbeing can be measured - and are much greater than its cost. This report comprises independent journalism financially supported by AXA PPP healthcare.

In this report

Finding the meaning behind the ‘wellbeing’ buzzword

Trendy term caught on quick - now it’s time to put it to work

When Judith Schmuck head of employee engagement at GVC (owner of Sporting Bet and bwin.party), brands it “kind of empty” you have to wonder if the HR profession really likes its own newly created buzzword: wellbeing.

Judith Schmuck of GVC

For those who haven’t heard it (where have you been?); wellbeing is de rigueur but while few disparage its holistic sentiment, many worry that unless it can be tied down more precisely, there’s a real risk it loses meaning and becomes just another empty buzzword.

“Wellbeing is a fascinating, very relevant topic, but it’s new to the workplace, and as such, it’s still being defined,” argues Eamon Tuhami, chief executive of employee-to-manager communication app, Motivii. “It’s an improvement on ‘engagement’ – which is also vague – because wellbeing is about the individual and their self, but that’s also its Achilles’ heel. Being so personal, it means different things to different people.”

As if to confirm this, recent studies suggest workers’ wellbeing is affected by everything from financial worries to workplace issues such as presenteeism to how much sleep they get - which begs the question for employers – where to start?

“You hear the word used, but there’s so much under the surface,” argues Sharon Wands, HR Manager for Rentokil Initial. “For us it’s health and safety, but since most of our staff are on the road, we argue it even includes scheduling appointments better, so they don’t feel stressed rushing from one job to another.”

You hear the word used, but there’s so much under the surface

Says Schmuck of GVC: “To me wellbeing is how people sense they are treated. If people don’t get on at work a yoga class won’t make any difference, so it’s hard to pinpoint. If you define it as looking at what people need, you can go into even the most minute detail. I’ve changed our light bulbs, because they weren’t bright enough. Is this wellbeing? I think so.”

Two schools of thought seem to be emerging: one says wellbeing policies should comprise everything and the kitchen sink, while another suggests they should centre on business-led issues with some attempt to measure a return on investment.

“Because ‘wellbeing’ is so personal, you can turn people off with how to be the perfect person, so we’ve decided to provide as much advice as possible,” says Michelle Bradshaw, compensation and benefits director for the UK arm of tech firm Oracle. She says: “Wellness has to be made personal to people for it to work. We ask people what makes them unhappy, and offer ways they can address this bit by bit – from giving toolkits and advice about sleep, resilience, physical wellness – even menopause awareness, which is a new set of literature we’re about to launch for our mid-year career women.”

Others argue any wellbeing strategy must prioritise business problems. “A third of our sickness is psychological ill-health,” says Barbara Davenport, head of wellbeing at rail operator GWR. “We work closely with employee assistance provider Validium to ensure staff feel able to open up about mental health, have prioritised manager training on spotting signs of poor mental health and we plan to introduce mental health first-aiders soon.”

To give wellbeing more definition Wands says she divides it into three key areas – physical, mental and financial – as does Tom Loeffert, HR director at SAP UK. He says: “The environment we live in – our always-on, blurred work/life - isn’t going to change,” he says. “So it’s our responsibility to give people the tools to deal with it. Ultimately, wellbeing is really all about demonstrating we have our staff’s best interests at heart.”

Wellbeing is really all about demonstrating we have our staff’s best interests at heart

Specific policies SAP have launched on the financial wellbeing side include offering ISAs to help younger staff build funds to help them buy a home, while Wands of Rentokil Initial is looking at introducing a debt finance scheme that enables staff to consolidate and pay off their loans at a cheaper rate of interest at source through payroll. Other firms - including some SMEs - are having success with hyper-personalisation of benefits.

But even when neatly carved up under different banners, no-one is pretending creating wellbeing is easy. “There’s definitely fear this could be a bandwagon,” argues Tim Marsh, author of the recently-published A Handbook of Organised Wellbeing for the British Safety Council. “Over-egging it is as bad as doing nothing,” he adds, “The biggest problem,” he observes, is managers following through. He says: “We still don’t train managers in soft skills. Many are not even equipped with talking about wellbeing, often because they are men and of a certain age.”

For Raj Hayer, HR advisor at people analytics platform Weavee, the issue is even more fundamental than this: “You can’t improve wellbeing unless you create trust from staff that you really do care,” she says. “In this sense, all wellbeing strategies are useless without leaders first creating connections with their staff.”

The good news is that wellbeing does feel like it will have a following, and that it is gaining currency. Even better are the conclusions of the government’s just-published Thriving At Work report. It wants firms to actually report on the mental wellbeing of staff (only 11% currently do), which should, arguably, begin to turn a sometimes-fluffy term into something with real meaning - with benefits for both employers and employees.

Presenteeism and the hidden costs of staff who are glued to their seats

Smart thinking required to stop staff from working while sick or lingering at the end of the day

The cost of absenteeism is well-known. What is less well-known is the cost of presenteeism, which may be ten times greater.

Presenteeism was traditionally defined as an employee coming into work when not physically or mentally fit. The term has now been broadened to include employees who are at work but simply disengaged says Cary Cooper, Professor of Organisational Psychology and Health at the Alliance Manchester Business School.

“Our consultancy Robertson Cooper surveyed 39,000 workers and found that 28 percent of them came into work when physically ill and 12 per cent were job dissatisfied, with only 35 per cent happy and healthy,” he says.

In a CIPD survey 72% of organisations had observed presenteeism over the past 1 year

This leakage of productivity is inherently difficult to measure, including such phenomena as employees who stay at their desk on Facebook waiting for their boss to leave and workers surreptitiously running an eBay trading business during office hours. However a study by the non-profit Integrated Benefits Institute in the US put the costs of health-related presenteeism alone at more than ten times that of absenteeism.

Presenteeism remains a key challenge for organisations wanting to look after staff wellbeing, remarks Rachel Suff, senior employment relations advisor for the Chartered Institute of Personnel and Development.  “Our 2016 absence management survey found that 72 per cent of organisations had observed presenteeism over the past 12 months with 29 per cent of organisations reporting an increase in this trend.  Presenteeism is particularly common in organisations where a culture of long working hours is the norm and where operational demands take precedence over employee wellbeing,” added Ms Suff.

Professor Cooper argued that presenteeism is increasing due to high levels of job insecurity since the recession. “A couple of other factors also lead to presenteeism such as workers not wanting to let their colleagues down so they turn up to work ill and not wanting their absenteeism on their HR records.” It’s hard to say whether the emergent gig economy would lead to more presenteeism, he says. “It would depend on how your employer treated you.  If you’ve got a gig employer who wants you present then you’ll get presenteeism but if you have a flexible working culture then it won’t necessarily lead to presenteeism.”

One issue is that top management hardly set a good example, and often try to position themselves as superheroes.  In 2011 Lloyds Bank chief executive António Horta Osório took time off because of stress - but this is a rare example. More common is the attitude of Jamie Dimon, chairman and chief executive of US bank JP Morgan, who was diagnosed with throat cancer in 2014 and sent an email to all employees saying he would “run the company as normal” while undergoing radiation and chemotherapy.

Another factor contributing towards employee engagement is employees having autonomy and control over their jobs, remarks Professor Cooper. “Gym membership and ping-pong tables aren’t sufficient in terms of developing a wellbeing culture. A wellbeing culture is where your line manager gives you control and autonomy over your role and makes you feel valued.”

One firm that has taken this kind of message to heart is London-based branding agency Whistlejacket. “We don’t offer staff holidays, we just ask staff to take whatever they think is appropriate,” says co-founder Richard Morris. “When we set up the company, we didn’t want people stressing about counting days or missing out on family occasions if they didn’t have any leave left. Interestingly - we’ve had to introduce a minimum allowance, as the ‘unlimited’ offer seemed to dissuade staff from ever taking leave; quite the opposite to what we intended.”

Richard Morris, co-founder of London-based branding agency Whistlejacket
Richard Morris of Whistlejacket

Mr Morris says that flexible working approaches on holidays and working hours means that presenteeism isn’t a worry for the firm. “But of course, there are people who just can’t help themselves. So I make a personal point of asking everyone who is still in the office when I am leaving what they are engaged in, can it wait, and can I help?“

But it’s not only trendy creative agencies that are keen to have highly engaged employees. Southport-based law firm Fletchers Solicitors offers flexible working policies and has run ACAS-accredited mental health awareness training as well as “personal resilience” workshops to enable staff to identify when they might be feeling stressed and how to develop coping strategies.  Fletchers also offers subsidised gym and yoga class membership. Six months later, days lost to sickness have been reduced from 2.29 per cent to 1.24 per cent.

By creating a positive culture… we’re hopefully making presenteeism less likely

However, benefits are only one factor in maintaining employee engagement, acknowledges Tim Scott, people director for Fletchers. “We’ve had a big push on wellbeing but we’re also working hard on aligning our business objectives with personal targets of employees. One of the key motivational aspects of working here is that everyone understands what they are doing to influence the success of the company.”

Mr Scott admits that presenteeism can be difficult to spot in an environment where everyone is focused on meeting targets and supporting our customers. “The honest answer is that I don’t think we can ever really know how big a problem presenteeism is – someone who is really good at hiding how they are feeling could make sure no-one ever knows. That said, by creating a positive culture in which team members know they can speak openly to their managers, the People Team or their colleagues about how they are feeling – and that action will be taken as a result - we’re hopefully making that less likely.”

 

Employee benefits get personal as the workplace evolves

Flexibility needed in an era of flexible and remote working with changing demographics

Forward-thinking employers are now going beyond one-size-fits-all benefits packages to offer highly personalised benefits, tailored to the individual needs and situation of staff members. These employers get a personalized benefit too: more motivated employees and lower staff turnover.

The trend towards hyper-personalised benefits has been driven by a greater desire from employers to understand their staff, bolstered by legislative changes that have forced firms to be more efficient in handling employee data such as the introduction of PAYE Real Time Information which forced them to send monthly data to tax authorities for the first time.

Even when offering a wide range of benefits, previously “everyone saw the same menu”, regardless of their age, gender or position in the company, says Debi O’Donovan, director of the Reward & Employee Benefits Association.

“But companies quickly realised that you can’t put people in a box,” she adds.

Benefit packages need to be redesigned to catch up with the changes to work that have occurred in recent decades, says Matt Macri-Waller, CEO of employee experience provider Benefex, such as the rise in flexible and remote-working. As such, benefits are becoming more lifestyle-orientated in response to the professional and personal situation of staff members, but also to reflect company culture and values.

Hyper-personalisation comes down to the things that individual employees want

“Hyper-personalisation comes down to the things that individual employees want, when they need them and accessed in the way they want,” he says.

For employers, there are multiple benefits to offering more personalised packages from boosting morale to attracting talent and staff retention. For Julian Smith, managing director of online retailer Bathroom Takeaway, these benefits are a way to both reward and acknowledge the individuality of his 73 staff.

“It’s about understanding what their lives and ambitions are and that they don’t need to go somewhere else to achieve those things. Our turnover of staff is incredibly low,” says Mr Smith.

Lisa Forde, director of online stationery companies Dotty About Paper and Tree of Hearts
Lisa Forde of Dotty About Paper and Tree of Hearts

Employee benefits include taking high-performing staff out of the office for days of activities and events, consumer discounts brought in through providers such as Perkbox, and access to physiotherapists and chiropractors through Simplyhealth, reflecting the company’s commitment to employee wellbeing. Even the firm’s approach to more traditional benefits is built to suit its staff: the business brought in pensions two years ahead of the autoenrollment date set by the government, and contributes 5% - far above the minimum 1% required of employers. It has just introduced a performance-related pay scheme, which will pay out in June and December - the two pinch points of the year for staff in terms of personal finance.

Lisa Forde, director of online stationery companies Dotty About Paper and Tree of Hearts, offers her 12 members of staff a range of benefits, from complimentary stationery to flexible working patterns and childcare vouchers.

It helps with their productivity and focus, and it helps with morale

“Different employees at different stages of life need different things. It’s about trying to accommodate that. It helps with their productivity and focus, and it helps with morale,” says Ms Forde.

Smaller firms may not be able to offer the highest wages or the biggest range of benefits, but creating extremely personalised packages can attract and motivate staff, she says. Indeed, while capacity may be the challenge for smaller businesses handling personalised benefits, for example there may be problems finding staff cover to facilitate flexible working or short-notice absence, it is potentially easier for owners and managers to understand their staff and build a suitable offer.

Technology is a must for large companies trying to scale hyper-personalised benefits to overcome the challenge of understanding potentially thousands of staff, says Mr Macri-Waller. Such software can analyse and cross-reference large amounts of employee data, for example, to provide real-time insights into staff needs and wants.

Issues can arise when employee data is held within different software and systems and regarding how that sensitive information is handled, especially when it is shared with independent benefit providers brought in to administer the packages.

As well as understanding how employee demands may differ across the company, large employers, in particular, need to successfully communicate what tailored benefits are available. “Unless your staff appreciate what you give as benefits it’s a waste of money,” says Ms O’Donovan.

A recent Reward & Employee Benefits Association survey suggests investment in hyper-personalised benefits will continue: 76.5% of respondents said there will be an increased focus on employee benefits by 2025. Elderly employees may be focused on pepping up their pension plans as state retirement provision becomes ever-more distant; younger employees may need help with record student debts or help to buy into an inflated housing market. Personalising benefits for this multi-generational workforce could be the next challenge.

How wellbeing helps the bottom line as well as the workforce

Employers that have assessed the financial returns of wellbeing initiatives like what they see

Calculating the balance sheet benefit of a wellbeing programme is one of the most challenging equations in business today. The concept bristles with commercial potential but confounds accounting techniques and is loaded with interpretation.

There are big picture numbers - UK companies lose £26 billion in productivity with 9.9 million working days lost due to poor mental health and a further £15.1 billion from the drain of ‘presenteeism’, according to research by the Centre for Mental Health and the Health and Safety Executive.

But applying that to a company or employee is harder to quantify. An employee’s psychology is crucial to their performance yet cannot be readily measured and plugged into a spreadsheet.

However, wellbeing is becoming a core component of a company’s structure and part of their offer to attract the best recruits. Given that acquiring and retaining talent is a key strategic objective in most progressive firms, this provides a start to the measurement process as wellbeing programs can reduce the direct and indirect costs caused when staff leave.

There’s also the potential to reduce days lost to both physical and mental health issues. The Chartered Institute of Personnel and Development (CIPD), the professional body for Human Resources, reports that 137 million work days are lost annually in the UK due to mental health issues, including stress, anxiety and burnout in the UK.

Its annual conference, in Manchester on November 9 and 10, has just held sessions on how to embed wellbeing into a business and put a value on their outcomes.

Rachel Suff, CIPD senior employee relations adviser
Rachel Suff of CIPD

South Liverpool Homes, a housing association managing around 3,700 homes, which has taken the Sunday Times Best Not-for-Profit Organisation to Work For title for the last four years, introduced its current wellbeing project in 2013 with its chief executive and head of HR playing leading roles. Within a year, sickness rates had decreased by 54 per cent resulting in a £25,000 for that year with the positive impact continuing over subsequent years while customer satisfaction rose to 90 per cent.

But only 17 per cent of companies evaluate their wellbeing programmes, according to CIPD research and its senior employee relations adviser Rachel Suff comments: “Saving £25,000 over a seven-month period gave South Liverpool Homes the business case for future investment. But an evaluation programme does not have to be too sophisticated and drill down into every pound as you can build a strong narrative and show that is effective by the way the workforce performs.

A lack of evaluation doesn’t necessarily put a scheme at risk

“A lack of evaluation doesn’t necessarily put a scheme at risk but it is so important to build a business case for continued investment and to direct the money where it counts and know it has an impact.”

Monitoring selected key performance indicators, ranging from soft metrics such as employee feedback to absence rates, creates structure, she adds.

The Employee Experience Index, a workplace measuring tool devised by IBM and Globoforce, recorded that employees with more positive experiences at work were ‘much more likely to report significantly higher levels of discretionary effort.”

A prime example of the potential benefit emerged in a Health and Safety Executive analysis of Somerset County Council’s £510,000 stress reduction programme which saved the authority £1.9 million over three years.

Research by consultants PwC found that 83 per cent of employees felt their wellbeing influenced their productivity and 33 per cent said poor wellbeing was a factor in leaving a job.

“Investment in wellbeing schemes need not cost a lot of money but they do require bravery, commitment and good employee communications,” says Philip Smith, director in the people and organization practice at PwC, which has created mental health champions at every grade across its 20,000 strong workforce.

There are real gains to be made but it requires bravery from management and staff

“Companies that make that investment have better productivity per employee, better return for shareholders and the consequence of that is a better overall return on the share price.

“There are real gains to be made but it requires bravery from management and staff to make that step but, if you do it and measure it, you will start to see real returns.”

CA Technologies, the multinational software firm with a market value of around £10 billion, is convinced that its employee wellbeing schemes are worth the effort and investment. It launched a “Wellbeing at CA” programme in July that includes a four-week programme designed to improve the mental resilience of all employees.

“It is not just a moral imperative, it’s a business one too,” reckons Marco Comastri, EMEA general manager.

Small firms need to wake up to the benefits of wellbeing

SMEs have the most to gain from a wellbeing strategy and the reduction in staff illness it can bring

Every time a member of staff goes sick at award-winning promotional branding firm, Outstanding Branding, it’s a big deal. The business has 23 staff, which means when one is missing there’s no inbuilt slack. “Oh god, any sickness has an enormous impact,” says sales and marketing director, Andy Thorne. “Not only does one person already represent a large proportion of our total staff, an ill employee’s impact can be exacerbated if their absence coincides with someone else being on holiday, or they are the main expert in their field. That’s when any illness can really impact service delivery.”

The plight facing Thorne is one that’s replicated daily in small-to-medium sized businesses up and down the country. For while it’s often thought big business dominates, it is actually the UK’s 5.5 million SMEs that are the real backbone of the UK economy. With these firms employing more than 16 million people (nearly two-thirds of all private sector employment), their dominance is such that when it comes to talking about the cost of poor wellbeing and sickness absence, we should really be talking about the disproportionate burden suffered by SMEs.

Perhaps one of the most shocking figures is that most SMEs (96% of them), are actually micro businesses, employing fewer than 10 people, which means the problem of absence is magnified even further. Data shows not only are more sick days taken by staff working for SMEs, but one in seven SME employees were absent for four weeks or more in the last 12 months alone (according to research by Ellipse).

And yet despite such the perils of staff absence at SMEs there is a curious irony at play: most SMEs think they are too small to have wellbeing strategies. Recent research finds a third of small business owners think wellbeing benefits are just for larger firms, with 43% admitting they have never considered offering them.

Wellbeing is absolutely something small businesses can both do, and afford

According to John Dean, managing director at consultants Punter Southall Health & Protection, it’s a mindset they need to break. “Wellbeing is absolutely something small businesses can both do, and afford,” he says. Whether it’s “ensuring staff have proper lunch-breaks, to introducing fitness challenges, or offering flexible working.” he argues there are simple steps SMEs can introduce to significantly impact mental wellbeing in particular – now the leading cause of absenteeism from the workplace.

Thorne lays on staff nights out, team-building days, and even has a policy of shutting down for Christmas, giving staff extra holiday on top of their annual leave. And he says it’s essential. “We simply don’t want burn-out,” he says. “Because of headcount some SMEs will pressurise ill staff to come back to work before they’re ready, but it’s just not worth it.

“Just recently, one of our employees had a kidney transplant – he’d been on this waiting list for a while, and suddenly a match came up. Although we had to deal with the slight disruption, we’re almost having to stop him coming back too soon!”

For other health benefits, Outstanding Branding partners with provider Perkbox – which for a few pounds per employee each month gives employees access to hundreds of offers that big brands want their staff to access – including discounted gym membership.

Employee assistance programmes provide a cheap and excellent counselling and support service, but they are often underused

As mental health becomes even more important, Dean says SMEs need to open up more and let their staff talk about issues impacting them – and an emerging area is financial wellbeing. “Employee assistance programmes provide a cheap and excellent counselling and support service, but they are often underused,” he says. “A good first step would be employers doing more to promote them – so staff actually know support exists, and that the service is confidential.”

Rebekah Tapping, HR director at employee benefits firm Personal Group is at the top end of the SME scale with 250 staff. She sees her role to help staff maintain “a state of balance” so they have the “physical and mental health to overcome their challenges.” One recent move has been to promote financial wellness. “We’ve just partnered with an affordable loan firm called Neyber to help support staff through difficult times,” she says. Our financial wellbeing strategy is about solving financial problems at the cause – not waiting until it causes mental health problems.”

This preventative approach is a sound policy. Staff absence is always minimised when problems are spotted early. The Centre for Economics and Business Research finds when ill-health is tackled quickly overall absence can be reduced by 17% and 18% for mental health issues. For bigger firms, this is when private medical solutions would come into the fray, although several providers, like AXA PPP healthcare are now in the market of building modular cover that SMEs can afford.

All of which means the message should be clear. SMEs may well suffer absence harder, but they don’t have to suffer in silence, and they can do small things that make a big impact. SMEs are famed for their ‘family’ feel, and so should be much better at having one-to-one wellbeing conversations with staff.

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